Roland Meyer

Roland Meyer inquired about Hanover's long-term expense ratio goals, specifically if year-over-year improvement is still expected despite the upcoming change in guidance. He also asked if current tech investments are neutral to the expense ratio due to efficiency gains or if they are still adding pressure, and sought clarification on the company's approach to increasing share repurchase volumes.

Answer

CEO Jack Roche stated Hanover intends to be disciplined on expenses and expects expense leverage with growth, funding tech investments by reducing expenses elsewhere. CFO Jeff Farber clarified that moving away from expense ratio guidance does not imply a lack of discipline, noting that strong underwriting results in 2025 led to an expense ratio elevation. He added that tech investments are funded by actively managing and creating capacity from other expenses. Jack Roche explained that increased share repurchases ($100 million in the last four months) are a result of strong earnings and lower growth leading to capital build-up, and buybacks are expected to continue playing a meaningful role in capital allocation.

Roland Mayer asked about the long-term goal for expense ratio improvement and the impact of technology investments, as well as the company's approach to share repurchase volumes and capital allocation.

Answer

President and CEO Jack Roche stated the company intends to be disciplined with expenses, expecting leverage with growth, and funds technology investments by reducing expenses elsewhere. CFO Jeff Farber clarified that moving away from specific expense ratio guidance does not indicate a lack of discipline. Jack Roche (Jeff Farber) noted the company bought back $100 million in stock over the last four months due to strong earnings and lower growth, emphasizing a balanced approach to capital allocation including growth, buybacks, dividends, and potential inorganic deals.